Nerve growth factor (NGF) is a polypeptide required for the survival and development of sympathetic and sensory neurons. It controls the expression of specific genes in these neurons. The molecular mechanism(s) by which the factor controls gene expression is not known. Our studies are focused on the intracellular events which follow the binding of NGF to its receptor in PC12, a cell which differentiates in response to NGF. One of the earliest events is a calcium-dependent activation of phosphoinositide metabolism. This finding is consistent with another of our results, namely, that NGF causes an activation of the Ca1+ and phospholipid-dependent enzyme protein kinase C. This activation is one of several changes in kinase function that occur, in some cases sequentially, within the cells. We have developed a cell-free, soluble phosphorylation system which reflects the prior treatment of the cells with NGF. This system involves the phosphorylation of a protein of 100,000 daltons (Nsp100). In extracts from cells treated with NGF the phosphorylation of Nsp100 is decreased. We have shown that the phosphorylation is decreased by phosphorylation of Nsp100 kinase by protein kinase C. We have prepared to other cell-free phosphorylation systems that also reflect the actions of NGF, one ribosomal and one nuclear. The pattern that is emerging is that NGF acts through a series of kinases in the cell leading to the phosphorylation of some key cellular proteins. One of these proteins is in the nucleus and its phosphorylation may underlie changes in gene expression. We have found a decreased nuclease sensitivity of DNA in NGF-treated cells, accompanied by a change in the morphology of the DNA. The morphological change correlates in time with one specific alteration in the cell phenotype, a disappearance of receptors for EGF, a mitogen for PC12 cells. Our recent studies show a decrease in the biosynthesis of the receptor. Our current effort is to explore the transcriptional regulation of the EGF receptor gene. Our hypothesis is that the decrease in the synthesis of the receptor for this mitogen is part of the mechanism by which NGF instructs the cell to differentiate.